Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q2 2024 Earnings Presentation
22 slides from Columbia Sportswear's earnings presentation, Jul 25, 2024
Slide 1: CFO Commentary and Financial Review Second Quarter 2024
Sportswear CFO Commentary and Financial R ev1ew Second Quarter 2024 July 25, 2024 Exhibit 99.2
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation contains forward-looking statements within the meaning of the federal securities laws regarding Co
Slide 3: Abbreviations and definitions
DTC DTC.com DTC B&M y/y U.S. LAAP EMEA SG&A EPS bps direct-to-consumer DTC e-commerce DTC brick & mortar year-over-year United States Latin America and Asia Pacific Europe, Middle East and Africa selling, general & administrative earnings per share basis points “+” or “up” “-” or “down” LSD% MSD% HS
Slide 4: We Connect Active People with Their Passions
W E C O N N E C T A C T I V E P E O P L E W I T H T H E I R P A S S I O N S
Slide 5: Capital Allocation Priorities
CAPITAL ALLOCATION PRIQRIDES Our goal i is to maintain our strong balance sheet and disciplined approach to ce capital allocation. Dependent upon our financial position, market conditions and our > strategic priorities, our capital allocation approach includes: @ INVEST INORGANIC GROWTH OPPORTUNITIE
Slide 6: Q2'24 Key Highlights
Q2’24 KEY HIGHLIGHTS Q2'24 FINANCIAL RESULTS COMPARED TO Q2'23 $570M $(0.20) -8% $(0.34) Net Sales Gross Margin Operating Margin Diluted EPS Q2’24 Highlights: The decline in net sales primarily reflects lower wholesale net sales in the U.S. due to retailer cautiousness, a difficult competitive envir
Slide 7: Q2'24 financial results summary table
• • • (dollars in millions, except per share amounts) Q2'24 Q2'23 Change Net Sales $570.2 $620.9 -8% Gross margin 47.9% 50.6% -270 bps SG&A percent of net sales 53.1% 50.3% +280 bps Operating income (loss) ($23.8) $6.2 ($30.0) Operating margin -4.2% 1.0% -520 bps Net income (loss) ($11.8) $8.4 ($20.
Slide 8: Q2'24 Net Sales and Growth vs. Q2'23 by region
Q2'24 NET SALES AND GROWTH VS. Q2'23 CANADA -4% (-4% c.c.) $27M U.S. =15% (-15% c.c.) $340M EMEA +3% (+3% c.c.) $104M LAAP +7% (+13% c.c.) S99M Commentary below is based on constant currency performance. US. + Wholesale: down high-20%, primarily reflecting the impact of lower Spring ‘24 orders DTC:
Slide 9: Q2'24 Net Sales by category, brand and channel
= . v Se =~ * Q2'24 NET SALES AND GROWTH VS. Q2'23 CATEGORY BRAND CHANNEL a PERFORMANCE PERFORMANCE PERFORMANCE APPAREL, ACCESSORIES . WHOLESALE: & EQUIPMENT: Columbia | -5% (4% cc, BP -s% cance) §-44% (-aa% cc, § -15% (-15% cc.) $464M $508M $21M $278M de ie FOOTWEAR: prAna WEAR DTC: -20% (-18% c.c.
Slide 10: Gross margin headwinds and tailwinds
Headwinds • Channel Profitability: lower margins primarily due to the impact of efforts to spur demand and reduce inventory, as well as changes in sales provisions • Other: includes changes in inventory provisions • FX: unfavorable effects from foreign currency hedge rates Tailwinds • Other: include
Slide 11: SG&A decreased $9.8M, or 3%
SG&A decreased $9.8M, or 3% $302.7 M Q2'23 Supply Demand Omni- Other Q2'24 Chain Creation Channel Q2’24 SG&A expenses were 53.1% of net sales compared to 50.3% in Q2’23 Primary SG&A Expense Reductions 5 * Supply Chain: lower expenses resulting from normalized inventory levels + Demand Creation: repr
Slide 12: Balance Sheet Overview
BALANGESHEET OVERVIEW__ Balance Sheet as of Junie 30, 2024 Cash, Cash Equivalents, and Short-term Investments Cash, cash equivalents and short-term investments totaled $711.1M, compared to $302.8M as of June 30, 2023. Inventory Inventories -29% y/y to $823.6M. We continue to utilize our fleet of out
Slide 13: Capital Overview
CAPITAL OVERVIEW “ Q2'24 YTD Net Cash Flow Provided by Operations S 9 Net cash flow provided by operating activities was $108.9M, 1 0 M compared to $9.7M for the same period in 2023. Q2'24 YTD Capital Expenditures S2 8M Capital expenditures totaled $27.8M compared to $22.8M for the same period in 20
Slide 14: 2024 Financial Outlook
2024 FINANCIAL OUTLOOK The Company's 2024 Financial Outlook and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of July 25, 2024 and are subject to significant risks and business uncertainties, including those factors described
Slide 15: Anticipated net sales declines
Anticipated net sales declines primarily reflect: Netsales — - Netsales declines are expected to be led by the SOREL brand down mid-20% and prAna down LSD%, Mountain Hardwear is expected to be up MSD% and the Columbia brand approximately flat. a + By region, a HSD% decline in Canada and a MSD% decli
Slide 16: Tax rate, interest income, share count, FX and Q3 outlook
Effective tax rate, interest income and share count The full year effective tax rate in our 2024 financial outlook is 24.0% to 25.0%. Interest income, net is anticipated to be ~$28M. The $3.65 to $4.05 diluted EPS range is based on estimated weighted average diluted shares outstanding of 59.3M. Fore
Slide 17: Cost savings targets
* Cost savings related to normalizing Operational Cost inventory levels : * Supply chain transformation . . Savings * Enterprise technology cost structure 2024 Savings Target: optimization * ae + We completed a reduction-in-force $75M to $90M Organizational primarily impacting U.S. corporate Cost Sa
Slide 18: Growth Acceleration Strategies
GROWTH ACCELERATION STRATEGIES + Target new, younger active consumers to expand market share in nbia areas we are currently underserving * Elevate innovation and style, with a focus on more powerful collections * Streamline color and style counts * Target a more balanced, full funnel approach * Opti
Slide 19: Appendix
Slide 20: Constant-currency net sales non-GAAP note
(1) Constant-currency net sales is a non-GAAP financial measure. See “References to Non-GAAP Financial Information” above for further information.
Slide 21: Six Months Free Cash Flow Reconciliation
SIX MONTHS FREE CASH FLOW RECONCILIATION COLUMBIA SPORTSWEAR COMPANY Reconciliation of GAAP to Non-GAAP Financial Measures Net cash provided by (used in) operating activities to free cash flow (Unaudited) ‘Six Months Ended June 30, (hemor) 2026 2023 "Net cash provided by (used in) operating acivitie
Slide 22: Coluw
ia | bi m Coluw Se 3